Lugano Diamonds & Jewelry Inc. plans a local expansion that mirrors the sales growth now being seen at the Newport Beach-based designer, manufacturer and retailer of high-end jewelry.
The company, whose unique rings, necklaces, earrings, bracelets and brooches cost an average price of around $115,000 per item, and often top the $1 million mark, inked a 11,500-square-foot lease at Fashion Island at a spot between Whole Foods and R+D Kitchen. The location at the upscale Newport Center shopping center, previously used by Canaletto Ristorante Veneto, will hold a new concept for the jeweler, which has made clients and community the forefront of its business model.
It will serve as both a store as well as a membership club described by company officials as “a home away from home” for its high-end clients, which reportedly includes several members of this week’s OC’s Wealthiest list. The club, Privé, will have a food and beverage program, events and nonprofit partnerships “in a comfortable setting that feels like an extension of our client’s homes,” according to Lugano co-founder and Chief Executive Moti Ferder.
“Lugano is known for the events and experiences we create for our clients, and Privé is our way of expanding those offerings,” Ferder told the Business Journal. “It’s a new way to further engage with our clients.”
The company’s unique community-driven business model—it sponsors over 100 events each year—has found an audience among customers and investors of late. Compass Diversified Holdings (NYSE: CODI), based in Westport, Conn. but with executive offices in Irvine, bought a nearly 60% stake in Lugano in a roughly $263 million deal last September.
Regulatory filings from Compass, which is valued around $1.6 billion, indicate that Lugano had 2021 pro-forma sales of $125 million. In the first quarter of this year it reported revenue of $47 million. Lugano “continues to perform significantly ahead of our expectations,” Compass CEO Elias Sabo told analysts in May.
Added Compass Chief Operating Officer Pat Maciariello: “We believe the team at Lugano has created a better business model to serve the needs of their clients.” Compass’ latest annual report notes that Lugano’s client base “generally consists of sophisticated, high-net-worth individuals who value long-standing relationships and a personalized sales approach over one-time purchases and the high-pressure sales tactics used by other jewelry competitors.”
Privé will occupy most of the new space at the new Fashion Island location, while a 3,500-square-foot portion will be dedicated for a new salon with an open-door policy; previously, Lugano’s flagship Newport Beach location was only available via appointment.
“This location is in the heart and center of Newport Beach, and will allow us to widen our circle and get in front of more people, and forge new relationships,” Ferder said. The new location will include touches that Lugano is known for: luxe décor and furniture in a “welcoming environment” that is aided by the absence of counters separating workers from clientele.
The store sells what it refers to as “wearable works of art” designed to be worn every day, as well as traditional jewelry statement pieces. “We make sure we have versatile pieces that you can wear to a normal dinner or the gym, not just a black-tie event,” Ferder said. “Our job is to inspire people and expose them to how jewelry can enhance their life and happiness, whether it’s a $2,000 piece or a $2 million piece.” The Fashion Island salon is set to open in December; Privé will follow in January 2023.
Privé, which means “private” in French, is an extension of the salon experience, with memberships available to existing Lugano clientele. The firm noticed demand for such a concept in part after debuting its first open-door salon in Aspen, where customers spent an hour on average shopping. “That’s much more than traditional retail,” Stuart Winston, Privé’s managing director, said. “We serve our customers coffee or champagne and take the time to get to know them and what they’re looking for. We want them to be as comfortable as possible.”
Privé will significantly ramp up that engagement, with a food and beverage program headed by James Beard Award-winning Chef Michelle Bernstein; a specialized spirits menu; a wine club; and invite-only special events.
Membership fees for Privé were undisclosed. Lugano isn’t the only Newport Center spot eyeing a new membership model. The new owners of Pendry Newport Beach—backed by locally based firms Montage International and Eagle Four Partners—are planning what sources describe as an exclusive social club for the new hotel, formerly the Fashion Island Hotel. The hotel, located not far from the new Lugano store, is set to debut next year.
Like it does with every new location, Lugano will make community and philanthropy a cornerstone at its new Fashion Island hub, such as quarterly culinary events with Ment’or, a nonprofit founded by famed chefs Thomas Keller, Daniel Boulud and Jerome Bocuse to help cultivate and support young talent in the culinary industry.
Lugano is a frequent partner in the local arts scene—Ferder sits on the board of the Segerstrom Center for the Arts and his wife and Lugano co-founder, Idit Ferder, is on the board of trustees at the Orange County Museum of Art, which will provide free admission to the public upon its opening later this year after an endowment from the jeweler.
Other areas of interest for Lugano include healthcare and education. “Our members and clients are active members of the community, and we want our firm to reflect that,” Ferder said.
Lugano currently counts five stores, and will open two this year in addition to the Fashion Island outpost, in Houston and Washington, D.C. Both will be open to the public.
Lugano isn’t just ramping up its retail footprint; the company recently signed a lease to bring its local office operations together across two floors at 620 Newport Center. The company previously counted about 20,000 square feet of space at the Irvine Co. office campus; its headquarters now totals north of 40,000 square feet. Its one of the largest office expansions in Newport Center of late. “Newport Beach is our home, and it’s a natural place to grow and start our vision for Privé,” Ferder said.